In today’s economic environment, taking necessary steps to ensure your business survives a possible economic downturn is a vital part of forecasting. Doing so puts your start up at an advantage and better positioning for deft and adaptation in case of a recession.
While financial planning can help your business survive the tough times, it’s also good practice to recession proof your business starting now. Here are some ways to start being smart about your business.
Focus on your Finances
No matter what size your business is, it is wise to revolve your business decisions and strategies around your financial health, or your bottom line. Being financially-centered is a mark of business stability- and it all starts by setting up a financial dashboard.
This allows you to run numbers and show significant key performance indicators to show current or historical financial health. By having this quick macro view of your financial performance, you are able to make sound and timely business decisions along the way, without so much digging into tons of files or paperwork.
Another way to recession-proof your finances, is to track your cash flow. Of course, many business owners would say they do – but it’s important to look beyond the normal tracking cycle and put due diligence to work.
Setting up a cash flow planner is one way of being able to track cash flow to show projected income and expenses for the quarter. This allows you to pinpoint the critical stages. This also allows you to plan your expenses carefully, and create other products and/or services to increase the cash-flow over time.
If you are seeing a healthy influx of income vs expenses though, don’t get too excited and splurge. As a startup, running a tight ship on expenses should be the practice, and unplanned expenses or investments should be justified. As always, saving for a rainy day will help you weather the storm just in case.
Maximize Your Marketing
Let’s imagine you are nearing the end of the second quarter, and you already have reached your client quota for the year. Or you manage to land a big business with a client much earlier than forecasted. Sounds like you have all your financial goals achieved in such a short time so you feel you are all set.
While that sounds like an ideal scenario, having achieved your targets at an early stage of the cycle means that you get to have more opportunities to uncover. Now is not the time to rest on your laurels; instead, continue to do capture sales and launch marketing campaigns – as you can never tell what lies ahead with your existing client list.
A consistent and strategic marketing plan in place will surely fill your sales pipeline with prospects to convert to qualified sales. Optimizing your marketing campaigns will also help capturing projected sales – so always keep it going and growing.
In addition, continuing to increase your customer base by networking and actively engaging with your audience, offering promotions and deals on slow moving products and services, and expanding to unexplored markets are just other strategies to maximize your marketing budget. Remember, every dollar counts.
Innovate and Inspire
Startup businesses flourish when producing a premium product or service with value pricing. Think of edgy ways to market your niche, and help you stand apart from the competition.
Whether it’s innovating a new product line, re-branding a product or a service to a potential market segment, or perform A/B testing on marketing campaigns, innovative measures can definitely help you uncover missed or potential opportunities.
Be in the know of the latest trends in your industry, attend webinars, keep a close watch on your competitors and always connect with the significant people in your network. Being inspired does not always mean coming up with the best and brightest ideas; it also means knowing where you stand in your industry, so that you can always stay one step ahead.
Be bold, yet exercise prudence when necessary to prepare for those unforeseen seasons like a recession in entrepreneurship. No matter what the state of the economy is at any point, being financially-centered should always be the goal.